Alain Afflelou places €50M tap as founder increases stake; terms

Alain Afflelou Franchiseur SASU on Jan. 26 placed a €50 million increase of its existing 4.25% secured notes due 2026 for an undisclosed price, taking the total nominal amount outstanding to €460 million. Morgan Stanley was sole placement agent, and proceeds from the transaction are set to fund founder Alain Afflelou's acquisition of Apax Partners' shares in the company.

The notes were placed in May 2021 at par to refinance existing debt and fund a shareholder dividend. Lion Capital and CDPQ will remain the largest shareholders in the French eyewear company, but this week’s transaction will see Mr. Afflelou and his family's stake rise to 29% from 14%.

S&P Global Ratings said in a report published today that the shareholder reorganization "modestly hits" the firm's credit quality while "benefitting governance." The company is rated B/B2/B+.

The reorganization will be financed by an equity contribution and €14 million in cash alongside the tap of the existing notes. The company’s existing convertible bonds will be converted to equity, which S&P Global Ratings says will lead to a decrease in leverage to 6-6.5x, versus the 7x-7.5x previously expected. S&P Global Ratings treats convertible bonds as debt.

The 4.25% notes closed Jan. 26 at 99.829 for a 4.293% yield, according to S&P Global Market Intelligence data, having traded as high as 101.75 earlier this month. The next call on the notes is May 2023 at 102.125, and placement of the notes will settle Feb. 4.

The company also has €75 million of E+800 subordinated FRNs due 2027 which were placed as part of its previous refinancing exercise in May 2021. These bonds currently trade around 101.75.

Terms:

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